Do you have your sights set on a new home? Maybe a dream house on the Sunshine Coast or something more modest in the suburbs? If so, it’s time to think about pre-approval.
Getting a home loan pre-approval is straightforward and it’s something that an expert broker can help you with. It’s essential to ensure a smooth process and prepare you for what’s coming.
Still not convinced? Here are 5 reasons why you should apply for pre-approval before starting your property search.
There’s no shortage of online calculators that will estimate how much you can afford. But they only give you a general idea and the actual amount may be much less than you thought.
If you skip the home loan pre-approval process and rely on a simple calculator, you could spend weeks looking for a house, find the perfect property, and then realise it’s out of your price range when you eventually apply.
Everyone can view a house, and everyone can express an interest. They can even give the vendor a call and make a preliminary offer.
If you want to take things further and make everything official, you need to jump through a few hoops, but until that point, there are no restrictions.
As a result, it’s not uncommon for vendors to receive offers that eventually fall through, usually because the prospective buyer leaves their pre-approval late and realises they can’t afford the house.
By getting pre-approval early in the process, you’ll give vendors and brokers confidence, showing them that you’re ready to buy and have met the affordability criteria.
Without pre-approval, it’s easy to get carried away. You check the calculators, run your sums, and start to get a little creative with your budget. Before you know it, you’re looking at houses well above your price range in the hope that a lender will eventually give you more money or you’ll find a bigger deposit.
A home loan pre-approval gives you a reality check and ensures you stay within your budget. It streamlines your search and prevents you from wasting countless hours browsing properties you can’t afford.
It should only take a few days to get pre-approval, but you’ll need to supply some documents, including ID, pay slips, debts, expenses, and more. It can be a hassle, and it’s a relief to get it out of the way.
Getting pre-approval before you search for a house will expedite the application process when you eventually find something you like.
So, you find the house that you like but it’s a little over budget. You can buy it, but you’ll need to increase your deposit and reduce your safety net.
Is it worth it? Can you afford the repayments? Would you be spreading yourself too thin?
A pre-approval can’t answer these questions for you, but it can give you the facts and figures and point you in the right direction. It could be the push you need to find a cheaper house and stay within budget.
It’s clear that a home loan pre-approval is an essential part of the process, so how can you get one?
The first step is to work with an expert mortgage broker such as Fox Home Loans. We work with over 50 lenders and have access to hundreds of home loan products, helping you to find the best deals.
The following will be considered when you apply for pre-approval:
You’ll also be asked for proof of ID, proof of employment, and tax returns.
Initially, you’ll be given a conditional pre-approval, which means the lender is happy to provide you with the stated amount provided certain conditions are met. From here, you can progress to an unconditional approval, which means you have been approved in full and will be granted the loan upon settlement.
Your mortgage broker can help you with these steps and answer any questions you have about the process.
The house-buying process can be long and stressful, with numerous delays, frustrations, and information requests. But the pre-approval process is quite simple if you are adequately prepared:
Forget about trawling property websites and spending countless hours viewing homes that are probably out of budget. When it comes to buying a new home, your first step should always be pre-approval.
It provides some much-needed clarity and credibility while streamlining your search and confirming that you’re ready for the next step.
Contact Fox Home Loans to discuss your next move, get personalised assistance, and find the best pre-approval deals on the market.